Working To Drop The Poverty Trophy
It has become obvious that the organisation of the polity is affecting the economy as seen in country-wide insecurity
The article, “How We Became Poverty Champions of the World” remain incomplete if not followed with an article that suggests means and ways of dropping the poverty trophy. We are about reclaiming the title from India considering the daily negative economic news from Nigeria. There is need to come up with ways of getting out of this preposterous race to the bottom and join the prosperous league of nations. It has been a painful follow-up because it’s a rehash of several submissions that has taken up space in the media in recent times and I do not wish to sound like a broken record.
We cannot carry on in this manner in our economic environment and expect different results and there is evidence that that is what authorities intend to do. Those in authority want to intensify what they have implemented for last seven and a half years that dropped millions into poverty despite rhetorics of lifting a hundred million Nigerias out of poverty. I draw this conclusion from a Report titled “Imagine Nigeria’ Exploring The Future of Nigeria.” It postulates for Nigeria for another thirty years. It’s a statist document that wants more and more government interference, despite this interference being the bane of this administration.
To interrogate how to move forward beyond 2023 we must make a diagnosis of the root cause or causes that has plagued the last seven years despite spirited efforts seen in proclamations such as the Economic Recovery and Growth Plan ERGP and Economic Sustainability Plan (ESP). How come an economy that grew 7.5 per cent on the average over ten years of Presidents Olusegun Obasanjo and late Musa Yaradua in spite of the global financial meltdown of 2007 to 2010, fail to achieve a modicum of growth all through the seven years of President Buhari? Growth under Buhari is put at an average 1.1 per cent per annum by Bismark Rewane. (August edition of Lagos Business School Breakfast session)
Answer; on assumption of power in 2015 the new team did not only change the dirty water they threw out the baby that delivered the 7.5 per cent growth and replaced it with a lifeless ‘baby doll,’ the dead hands of government. Their actions emanate from their economic philosophy of dirigistic statism. This has resulted in further muddying of the economy waters through accumulation of humongous loans because this statist government is impelled to ‘borrow no matter what the cash flow of government says’. Government has become a dead weight on the economy.
This highlights how economic philosophies matter. A statist philosophy has led us into a debt crisis. A liberal economic philosophy that allows the private sector to really take charge translates into lower government expenditure and debt because a lot of slack is picked up by the private sector. I say look no further than the multibillion-dollar Dangote Refinery and imagine it is government executed. The private sector led telecoms revolution swelled government revenues rather than incur government debt.
Nigeria has once again proved the various dicta about government. The dead hands of government has succeeded in dousing the latent engines of growth that exist in the economy and had propelled us to largest African economy. If we continue this way, we will lose this trophy as well. Another saying is that government is a necessary evil yet in Nigeria we tend to want government in all spheres of our lives. The earlier we learn the lessons of the past few decades that Nigerian governments are not purveyors of national transformation but are the main obstacle to national transformation. Politicians like paying lip service to private sector led development but behave as masters to the private sector. I call for a change, government must become servants to the private sector not masters. Our salvation lies in the private sector not in government interference.
How do we exit the poverty league? We have to recover the baby that was thrown out, that is the economic policies that delivered 7.5 per cent annual growth for over a decade. In Nigerian political discussions we seem not to take economic growth rates serious except it results in recessions and exiting recessions becomes an achievement. Meanwhile a rising GDP acts as a rising wave that lifts all boats both ocean liners and fishermen canoes. Also, a crashing GDP means the tide going out leaving boats stranded on the sea bed.
A policy thrust that kicked started the 7.5 per cent on average growth in early 2000s was return of market determination of the naira value on assumption of office by Obasanjo. Apart from the liberal economic team he assembled it sent out the message that liberal economic policies were back in place and investors were pleased. The government in place held to this policy and ensured continuity until indiscipline of 2011 to 2014 ensued leading to the change in government. This ‘Change’ led to a change in economic policies and a change in growth. I posit that if the change of 2023 returns to liberal policies we should expect a return to higher growth despite new headwinds.
The next target for the economy should be nothing short of achieving double digit growth DDG. By introducing programs left undone in the stellar years of 2000 to 2012 we should be able to achieve DDG.
This includes serious attempts to increase our exports of high value goods which has been the Achilles heel and missing link in achieving currency stability. This is being addressed by the CBN Road to 200BN Program. A lot hinges on the success of this program. It is not an end but a step on the ladder of addressing the weakest link in Nigerian economy, that is our dependence on oil proceeds for forex needs of the rest of the economy.
A poor score of the 2000 to 2012 period is the abject performance in infrastructure acquisition safe in telecoms. However, the current infrastructure champions are leading us into what was captured in the book “Confessions of an Economic Hitman” by John Perkins, a debt trap. In addition, the current means of infrastructure acquisition is going to deliver infrastructure at piece meal pace. Our need of the triangle standard railway backbone, Lagos-Calarbar-kano, would require laying 8000 kilometres of rail lines. If sped up we are hardly laying 200kms per year, meaning 8000 km will be completed in forty to fifty years.
We cannot continue at this crawling pace with other unbuilt infrastructure such as high-speed rails and 100,000 megawatts of electricity amongst others. This requires us going on an infrastructure blitz by first putting the horses ahead of the cart in our endeavours. More about this in the article found in this link https:// punchng.com/infrastructureblitz-putting-the-horse-beforethe-cart Whenever we get infrastructure acquisition right Nigeria is guaranteed an annual contribution to GDP growth of about 5 per cent directly from expenditures and activities to put the infrastructure in place. Later comes the add on to economic growth by utilising the infrastructure in economic activities.
The change of 2023 must send the message out that liberal market policies that worked between 1999 and 2012 are back with government stepping aside for the private sector leading the charge in deed not in words alone. Next Nigeria has to work out means of not allowing politics trump economics. It has become obvious that the organisation of the polity is affecting the economy as seen in country-wide insecurity. The Report on the Future of Nigeria also alludes to this, in the last paragraph of page 12, it states inter lia ‘...all sectors in the society must come together to discuss priorities...and engender a grand national narrative for a renewed and rebranded country.’